Foreclosures, REOs, Bank Owned Properies, Shorts Sales…Distressed Properties!!!

These types of properties are now commonplace in Lake Tahoe, including Inline Village and Crystal Bay.  There is definitely strategy for selling, and especially buying in this environment.  Information is key for learning about which proprties are available at a discount.  Not all of these properties will be found in the local MLS.  Many of the Banks employ realtors from outside of the area to sell in Tahoe, and often the homes end up in a foreign MLS, most commonly the Reno and Truckee MLS. Other distressed properties can be found through information obtained from the local title company.  The list is dynamic and expanding at the moment, a list that was predominantly condos, now includes single family homes and higher end properties, new homes. Please contact me for an updated list as it changes pretty much all the time.

Thanx, Todd

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Pending home sales rise 6.7 percent in April

By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer Tue Jun 2, 3:51 pm ET

WASHINGTON – The number of U.S. homebuyers who agreed to buy a previously occupied home took the largest monthly jump in nearly eight years in April, but there are still plenty of danger signs for the U.S. housing market.

Home sales appear likely to head upward this summer, potentially to levels not seen since the stock market collapsed last autumn, but prices are expected to keep falling well into next year. Layoffs, which are causing foreclosures to soar, coupled with rising mortgage rates could dampen any real estate recovery.

The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts’ forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.

The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by Obama in February. Since buyers need to complete their purchases by Nov. 30 to claim the credit, “we expect greater activity in the months ahead,” Lawrence Yun, the Realtors’ chief economist, said in a statement.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.

While economists are encouraged by signs that demand for housing is returning, the outlook is far from sunny. Mortgage rates are rising, making homes less affordable for many borrowers. The average rate for a 30-year, fixed-rate mortgage is around 5.3 percent this week compared with about 5 percent last week, according to Bankrate.com.

Stock indexes advanced modestly in morning trading, but then traded in a tight range around the break-even point. Financial stocks fell after several banks announced plans to raise capital to help repay federal bailout funds.

The health of the U.S. housing market, mired in a three-year slump, is one of the key issues facing the economy. Though sales may be recovering, analysts cautioned that prices will take longer to stabilize because of the glut of unsold properties for sale. Prices are unlikely to rise until foreclosures start declining, and that’s unlikely to happen before the end next year.

The national median sales price in April plunged more than 15 percent from year-ago levels to $170,200, driven by sales of inexpensive foreclosures and other distressed low-end properties. That was the second-largest yearly price drop on record, according to the Realtors’ group.

Still unknown is the effectiveness of President Barack Obama’s $50 billion plan to prevent foreclosures by modifying loans in bulk. Analysts are growing worried that it will not have a substantial impact.

“I haven’t seen evidence yet of any significant modifications,” said Mark Zandi, chief economist at Moody’s Economy.com. “I was hoping that we would see more of a pickup.”

The Realtors’ index of pending sales contracts was 3.2 percent above last year’s levels and has risen for three straight months after hitting a record low in January. A nearly 33 percent sales increase in the Northeast and a 9.8 percent jump in the Midwest led the overall surge. Sales contracts were flat or up slightly in the South and West.

Still, Yun cautioned that the pending sales data is more volatile than in the past. Many homeowners need to sell their properties for less than the balance they owe on their mortgages — a so-called “short sale” — which requires the lenders’ approval. That process is often difficult, time-consuming and can fall apart before the deal closes.

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Tracking Loans Through a Firm That Holds Millions

By MIKE McINTIRE

Judge Walt Logan had seen enough. As a county judge in Florida, he had 28 cases pending in which an entity called MERS wanted to foreclose on homeowners even though it had never lent them any money.

MERS, a tiny data-management company, claimed the right to foreclose, but would not explain how it came to possess the mortgage notes originally issued by banks. Judge Logan summoned a MERS lawyer to the Pinellas County courthouse and insisted that that fundamental question be answered before he permitted the drastic step of seizing someone’s home.

“You don’t think that’s reasonable?” the judge asked.

“I don’t,” the lawyer replied. “And in fact, not only do I think it’s not reasonable, often that’s going to be impossible.”

Judge Logan had entered the murky realm of MERS. Although the average person has never heard of it, MERS - short for Mortgage Electronic Registration Systems - holds 60 million mortgages on American homes, through a legal maneuver that has saved banks more than $1 billion over the last decade but made life maddeningly difficult for some troubled homeowners.

Created by lenders seeking to save millions of dollars on paperwork and public recording fees every time a loan changes hands, MERS is a confidential computer registry for trading mortgage loans. From an office in the Washington suburbs, it played an integral, if unsung, role in the proliferation of mortgage-backed securities that fueled the housing boom. But with the collapse of the housing market, the name of MERS has been popping up on foreclosure notices and on court dockets across the country, raising many questions about the way this controversial but legal process obscures the tortuous paths of mortgage ownership.

If MERS began as a convenience, it has, in effect, become a corporate cloak: no matter how many times a mortgage is bundled, sliced up or resold, the public record often begins and ends with MERS. In the last few years, banks have initiated tens of thousands of foreclosures in the name of MERS - about 13,000 in the New York region alone since 2005 - confounding homeowners seeking relief directly from lenders and judges trying to help borrowers untangle loan ownership. What is more, the way MERS obscures loan ownership makes it difficult for communities to identify predatory lenders whose practices led to the high foreclosure rates that have blighted some neighborhoods.

In Brooklyn, an elderly homeowner pursuing fraud claims had to go to court to learn the identity of the bank holding his mortgage note, which was concealed in the MERS system. In distressed neighborhoods of Atlanta, where MERS appeared as the most frequent filer of foreclosures, advocates wanting to engage lenders “face a challenge even finding someone with whom to begin the conversation,” according to a reportby NeighborWorks America, a community development group.

To a number of critics, MERS has served to cushion banks from the fallout of their reckless lending practices.

“I’m convinced that part of the scheme here is to exhaust the resources of consumers and their advocates,” said Marie McDonnell, a mortgage analyst in Orleans, Mass., who is a consultant for lawyers suing lenders. “This system removes transparency over what’s happening to these mortgage obligations and sows confusion, which can only benefit the banks.”

A recent visitor to the MERS offices in Reston, Va., found the receptionist answering a telephone call from a befuddled borrower: “I’m sorry, ma’am, we can’t help you with your loan.” MERS officials say they frequently get such calls, and they offer a phone line and Web page where homeowners can look up the actual servicer of their mortgage.

In an interview, the president of MERS, R. K. Arnold, said that his company had benefited not only banks, but also millions of borrowers who could not have obtained loans without the money-saving efficiencies it brought to the mortgage trade. He said that far from posing a hurdle for homeowners, MERS had helped reduce mortgage fraud and imposed order on a sprawling industry where, in the past, lenders might have gone out of business and left no contact information for borrowers seeking assistance.

“We’re not this big bad animal,” Mr. Arnold said. “This crisis that we’ve had in the mortgage business would have been a lot worse without MERS.”

About 3,000 financial services firms pay annual fees for access to MERS, which has 44 employees and is owned by two dozen of the nation’s largest lenders, including Citigroup, JPMorgan Chase and Wells Fargo. It was the brainchild of the Mortgage Bankers Association, along with Fannie Mae, Freddie Mac and Ginnie Mae, the mortgage finance giants, who produced a white paper in 1993 on the need to modernize the trading of mortgages.

At the time, the secondary market was gaining momentum, and Wall Street banks and institutional investors were making millions of dollars from the creative bundling and reselling of loans. But unlike common stocks, whose ownership has traditionally been hidden, mortgage-backed securities are based on loans whose details were long available in public land records kept by county clerks, who collect fees for each filing. The “tyranny of these forms,” the white paper said, was costing the industry $164 million a year.

“Before MERS,” said John A. Courson, president of the Mortgage Bankers Association, “the problem was that every time those documents or a file changed hands, you had to file a paper assignment, and that becomes terribly debilitating.”

Although several courts have raised questions over the years about the secrecy afforded mortgage owners by MERS, the legality has ultimately been upheld. The issue has surfaced again because so many homeowners facing foreclosure are dealing with MERS.

Advocates for borrowers complain that the system’s secrecy makes it impossible to seek help from the unidentified investors who own their loans. Avi Shenkar, whose company, the GMA Modification Corporation in North Miami Beach, Fla., helps homeowners renegotiate mortgages, said loan servicers frequently argued that “investor guidelines” prevented them from modifying loan terms.

“But when you ask what those guidelines are, or who the investor is so you can talk to them directly, you can’t find out,” he said.

MERS has considered making information about secondary ownership of mortgages available to borrowers, Mr. Arnold said, but he expressed doubts that it would be useful. Banks appoint a servicer to manage individual mortgages so “investors are not in the business of dealing with borrowers,” he said. “It seems like anything that bypasses the servicer is counterproductive,” he added.

When foreclosures do occur, MERS becomes responsible for initiating them as the mortgage holder of record. But because MERS occupies that role in name only, the bank actually servicing the loan deputizes its employees to act for MERS and has its lawyers file foreclosures in the name of MERS.

The potential for confusion is multiplied when the high-tech MERS system collides with the paper-driven foreclosure process. Banks using MERS to consummate mortgage trades with “electronic handshakes” must later prove their legal standing to foreclose. But without the chain of title that MERS removed from the public record, banks sometimes recreate paper assignments long after the fact or try to replace mortgage notes lost in the securitization process.

This maneuvering has been attacked by judges, who say it reflects a cavalier attitude toward legal safeguards for property owners, and exploited by borrowers hoping to delay foreclosure. Judge Logan in Florida, among the first to raise questions about the role of MERS, stopped accepting MERS foreclosures in 2005 after his colloquy with the company lawyer. MERS appealed and won two years later, although it has asked banks not to foreclose in its name in Florida because of lingering concerns.

Last February, a State Supreme Court justice in Brooklyn, Arthur M. Schack, rejected a foreclosure based on a document in which a Bank of New York executive identified herself as a vice president of MERS. Calling her “a milliner’s delight by virtue of the number of hats she wears,” Judge Schack wondered if the banker was “engaged in a subterfuge.”

In Seattle, Ms. McDonnell has raised similar questions about bankers with dual identities and sloppily prepared documents, helping to delay foreclosure on the home of Darlene and Robert Blendheim, whose subprime lender went out of business and left a confusing paper trail.

“I had never heard of MERS until this happened,” Mrs. Blendheim said. “It became an issue with us, because the bank didn’t have the paperwork to prove they owned the mortgage and basically recreated what they needed.”

The avalanche of foreclosures - three million last year, up 81 percent from 2007 - has also caused unforeseen problems for the people who run MERS, who take obvious pride in their unheralded role as a fulcrum of the American mortgage industry.

In Delaware, MERS is facing a class-action lawsuit by homeowners who contend it should be held accountable for fraudulent fees charged by banks that foreclose in MERS’s name.

Sometimes, banks have held title to foreclosed homes in the name of MERS, rather than their own. When local officials call and complain about vacant properties falling into disrepair, MERS tries to track down the lender for them, and has also created a registry to locate property managers responsible for foreclosed homes.

“But at the end of the day,” said Mr. Arnold, president of MERS, “if that lawn is not getting mowed and we cannot find the party who’s responsible for that, I have to get out there and mow that lawn.”

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Tahoe’s first time home buyers

During the last seventeen years, I have been making loans in the Tahoe-Truckee area.  During most of the 1990’s a healthy percentage of my clients were first time home buyers purchasing condominiums or modest homes.  As home prices increased, first time home buyers disappeared from the Tahoe real estate market.  They simply could not afford to make the required payments on even the most modest of homes or condominiums.  In fact, from 2002 to 2008, I did not originate one FHA loan, the loan most commonly used for first time buyers.

One of the benefits of home prices declining is first time buyers are now returning to the Tahoe Truckee real estate market. Lower homes prices and low interest rates have made owning an affordable option to renting.  Consequently, over half of my clients who are seeking to buy a home are first time buyers and over half the purchase money loans I am working on are either FHA or VA loans.  

To understand the attraction of an FHA loan, I will share the story of a young couple I recently met.  They had one baby and another on the way. Their combined income was less than $6,000 per month. They managed their debt and credit conservatively so that they could qualify for as much financing as possible.  They had saved a little bit for a down payment and had a commitment from a relative to provide a gift to make up the difference.   I would like to take credit for having coached them to keep their debts low and their fico scores high, but the reality is their realtor was their coach and they were ready to go when I met them. 

Their realtor found them a three bedroom home for $250,000 and the seller agreed to credit to them three percent of the purchase price for recurring and non-recurring closing costs.  When the young couple closed on the purchase, the details were as follows:

Purchase price:                                 $250,000

Down payment:                                               $8,750

                Savings $3,000

                Gift       $4,750

Closing costs:                                     Paid by seller

Monthly payment (PITI)                               $1,766

I wonder how many renters in Tahoe and Truckee have household incomes of $6,000/month, good credit and the ability to come up with $8,750 for a down payment. 

Perhaps the best opportunity in today’s real estate market is for Tahoe’s first time buyer.

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Economic update from a mortgage lenders point of view

Thumbnail Sketch: The Pending Home Sales Index, compiled from surveys of signed but unclosed sales contracts by the National Association of Realtors^®, rose from 82 in February to 84.6 in March, 1.1% higher than in March 2008. Association chief economist Lawrence Yun was pleased, calling this perhaps “the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit.” But he cautioned that “we need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.” Indeed, the Case-Shiller index suggested that home prices are still falling at a significant rate. And, as you can see to the left, the number of applications for mortgages has declined, showing few signs of recovery. (Purchase money loan applications haven’t declined very much from their already weak numbers, but the number of applications for refis plummeted in the week ending April 24, even as mortgage rates eased slightly.) So it is difficult to say that the real estate market is going anywhere in particular, though we continue to have signs of its readiness to improve further. As Lawrence Yun says, the benefits—particularly for first-time buyers—are in place. Unmentioned, though, is the fact that we are likely to see a resurgence of foreclosures as lenders come out of their self-imposed freeze. Meanwhile, as if to remind us that we can make no assumptions about the future of the overall economy, the first estimate of first quarter Gross Domestic Product showed a decline of 6.14%, worse than the estimates of many reliable economists, and on a par with the crunching 6.3% decline in the last quarter of 2008. Studying the data for the overall economy, Augustine Faucher of Moody’s Economy.com concluded simply,“The economy is in the middle of what will end up being the worst U.S. recession since the Great Depression.” We may have mildly improving real estate sales figures in many areas of the nation—greatly improving in a few—and we may have momentarily happy stock markets, but there are no certainties out there just now. It is time, it seems to make business plans cautiously, but also time to step up marketing efforts to help the many who are thinking tentatively about buying but need information to gain the confidence to do so.

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Consumer confidence rising

   The big news last week was the upward jump in the Conference Board Consumer Confidence Index. It rose by a surprising 12 points to its highest level since September. Simply stated, if consumer confidence rises, consumers are more likely to spend more of, rather than saving, their disposable income; and if more retail purchases do indeed result, then the economy begins to grow; and if the economy grows, the employment rate improves. All of which leads, among other things, to a greater willingness to step up to the plate and buy one of those rock-bottom-priced homes on the market. That helps the real estate market’s recovery along and brings greater strength to the financial markets…and we all live happily ever after. Or until the next turn in the economic cycle. Thus, we are very justified in wondering just why the American consumer is feeling so noticeably better about the future of the economy. It turns out that the most salient improvement in consumer psychology is in the “expectations component” of the Index, which rose by a nearly stunning 19 points. Assessments of current conditions were far more restrained, with an improvement of less than 2%, leaving this portion of consumer confidence below even the levels of last January. Assessments of the present labor market, meanwhile, were relatively grim. But expectations for the labor market in the future rose strongly. As Scott Hoyt of Moody’s Economy.com concluded, “Consumers continue to see current conditions as bleak but are becoming much more upbeat about the outlook, particularly for jobs and business conditions. This is a very positive sign for the economic outlook and provides further evidence that the recession should not extend beyond the end of this year.” None of this should make us anticipate a quick increase in consumer spending, though. The current-condition components of the Index warn us that consumers, by and large, will need to see their expectations of improved conditions come true. But this is a strong endorsement of the proverbial light at the end of the economic tunnel.  

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SQUAW VALLEY USA & JONNY MOSELEY HOST 2009 SPRINT US FREESTYLE CHAMPIONSHIPS

March 26 - March 29, 2009
[Squaw Valley USA] March 12, 2009 - Squaw Valley USA and Jonny Moseley are set to host the nation’s top Mogul and Halfpipe skiers for the 2009 Sprint US Freestyle Championships, March 26 - March 29, 2009. With the 2010 Winter Olympics quickly approaching, visitors to Squaw Valley during US Freestyle Championships have the rare opportunity to watch the freestyle skiers who will be representing the US at the Vancouver Olympics in action. In addition to world-class competitions, US Freestyle Championships brings on and off-hill entertainment for all to enjoy. A Friday night party at 22 Bistro, a live hip hop pool party on top of the mountain, and a Saturday night concert at the Olympic Village Lodge are all part of Sprint US Freestyle Championships weekend at Squaw Valley USA.Of hosting US Freestyle Championships, Olympic Valley Freestyle-Freeride Team Head Coach, Nat Schirman says, “It’s been 22 years since we have hosted Freestyle Nationals, and with an Olympic year coming up, there could not be a more exciting time to bring it back to Squaw. Squaw Valley is a founding venue for freestyle skiing; we are honored to keep the tradition alive and to share this prestigious event with the community.”

Friday, March 27 is Mogul Competition day and since Squaw Valley’s mogul course is located at the base of the mountain, spectators do not need a lift ticket to watch the premier US Mogul skier showdown on Red Dog Face. Ladies’ and Men’s qualification and finals takes place all day, beginning with Ladies’ Qualifications at 9:30 am and Ladies’ and Men’s Mogul Finals from 1:15 to 2:15 pm. The day’s festivities commence in the Village Event Plaza for the Mogul Awards at 4 pm, followed by US Freestyle Championships Opening Ceremonies at 5 pm.

The celebration heats up Friday evening at the Village at Squaw’s hottest new après and dinner spot, 22 Bistro & Bar. Everyone is invited to mingle with competitors and freestyle skiing greats with Chef’s specials, drink specials, and select specials from the menu from 7 to 10 pm. Twenty Two bartenders will step aside as freestyle skiing legends, like Brad Holmes, take over as guest bartenders for the evening.

On Saturday, March 28, US Freestyle Championships moves up the mountain for Men’s and Ladies’ Halfpipe Competition in the Monster Park at Riviera. Both Ladies’ and Men’s Halfpipe kicks off with Qualifications from 9:30 to 11 am and Finals from 12:30 to 1:30 pm, with Halfpipe Awards taking place in the Riviera Park immediately following the competition.

Saturday, March 28, Monster Energy and Alice 97.3 present Live Hip Hop with San Francisco MC, Goodword at the High Camp Lagoon & Spa, el. 8200′. Influenced by Tribe Called Quest, De La Soul, The Ruler and Slick Rick, Good Word delivers fresh songs with mind blowing lyrics, unforgettable beats, and catchy hooks you hope stick in your head. The “underground/independent” hip hop MC has performed in over 40 different cities across the US, and the popularity of albums like, “Coulda Been That,” and “The Thanks Martin Mixtape” are spreading the good word to hip hop enthusiasts everywhere. Skiers, riders, and spectators can vibe poolside to the beats and lyrics of Goodword from 2 to 5 pm. The pool party is free with a lift ticket or season pass. www.goodword.us

The 2009 US Freestyle Championships’ antics reignite Saturday night with Matt Reardon’s Rock & Ride Tour with special guest SubjektToChange. Matt Reardon, professional skier by day and rock star by night, delivers masterful melodic jam and rock, choreographed to footage of top action sport athletes. Doors open at 8:30 pm and the show starts at 9 pm. Tickets are $10 and all concert-goers must be 21 & up with valid ID. www.reardon-music.com

The final day of competition, Sunday March 29 is Ladies’ and Men’s Dual Moguls on Red Dog Face. Qualifications begin at 9:45 am and Finals for both Ladies and Men are from 1 to 2:30 pm. Dual Moguls Awards are from 4 to 4:30 pm. In between Dual Mogul Finals and Awards, from 3 to 4 pm, all lift ticket and season passholders are invited to test their bump skiing skills against a friend or celebrity at the “Celebrity Grudge Match.”

2009 SPRINT US FREESTYLE CHAMPIONSHIPS SCHEDULE
*Event requires a lift ticket, Cable Car ticket, or spectator walking ticket

Thursday, March 26
• 10 am - 2 pm: Ski Halfpipe Official Training, Monster Park at Riviera*
• 10:30 am - 2 pm: Mogul Open Session Inspection and Training, Red Dog Face

Friday, March 27: Mogul Competition
• 8:30 - 10:15 am: Ladies Mogul Training and Qualifications, Red Dog Face
• 9 am - 1 pm: Ski Halfpipe Official Training, Monster Park at Riviera *
• 10:30 am-12:15 pm: Men’s Mogul Training and Qualifications, Red Dog Face
• 12:30-2:15 pm: Ladies & Men’s Mogul Finalist Training & Mogul Finals, Red Dog Face
• 4 - 4:30 pm: Awards, Village at Squaw Valley Events Plaza
• 5-7 pm: Opening Ceremonies hosted by Jonny Moseley, Village at Squaw Valley Events Plaza
• 7:30 pm: 22 Bistro & Bar Aprés Party (dinner, apps and drink specials with special guest bartenders)

Saturday, March 28: Ski Halfpipe
• 8:15 -11:30 am: Ladies and Men’s Ski Halfpipe qualifications 7 training, Riviera Park*
• 12:30 -2:15 pm: Ladies and Men’s Ski Halfpipe finals & Awards, Monster Park at Riviera*
• 2-5 pm: Live Hip Hop Pool Party with Goodword, High Camp Lagoon & Spa, FREE with lift ticket or season pass*
• 9:30 pm: Matt Reardon Rock & Ride Tour at Olympic Village Lodge, $10 tickets, ages 21 & up

Sunday, March 29: Dual Moguls
• 8:30 am - 12:45 pm: Ladies and Men’s Dual Moguls Training & Qualifications, Red Dog
• 1 pm - 2:30 pm: Ladies and Men’s Dual Moguls Finals, Red Dog Face
• 3 pm - 4 pm: Celebrity Grudge Match (challenge celebrities to a mogul dual), Red Dog Face*
• 4 pm - 4:30 pm: Awards, Village at Squaw Valley Event Plaza
• 6:30 pm: Banquet Dinner (private), Olympic Village Lodge

Attending Media: The press room, located in the Olympic Village Lodge - Creekside Room, is open daily from 8 am to 5 pm for credential pick-up and press information.

More Information on US Freestyle Championships is available on www.usskiteam.com.

The most up-to-date resort conditions, operation schedules, events and live mountain cams are available on www.squaw.com.

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Stimulus bill, ‘TARP II’ offer housing incentives

$15,000 homebuyer tax credit, higher loan limits, lower rates in play

By Inman News, Tuesday, February 10, 2009.

A $15,000 homebuyer tax credit, higher loan limits for Fannie Mae, Freddie Mac and FHA, and government spending to lower mortgage rates are all in play as Congress and the Obama administration near agreement on an economic stimulus bill and financial stability plan for banks.
The Senate today approved an $838 billion economic stimulus bill that includes a $15,000 homebuyer tax credit, just hours after President Barack Obama’s new Treasury secretary unveiled a multitrillion-dollar financial stability plan that includes $50 billion for foreclosure prevention programs.
The financial stability plan may also lead to an expansion of existing efforts by the Federal Reserve to drive down mortgage interest rates by buying mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae.
The version of the economic stimulus bill passed by the Senate in a 61-37 vote relies less on government spending and more on tax cuts to kick-start the economy than the version passed by the House Jan. 28 (see story). Only two Republicans voted for the bill in the Senate — Sen. Arlen Specter of Pennsylvania and Maine’s Olympia Snowe — and all 37 “no” votes were cast by members of the Grand Old Party.
Differences between the two versions of H.R. 1, the American Recovery and Reinvestment Act of 2009, must now be ironed out in a conference committee.
The House version of the bill would restore the upper limits for Fannie Mae, Freddie Mac and FHA loan guarantee programs to $729,750 in high-cost housing markets, where they stood for much of 2008 before being reduced to $625,500 — a step endorsed by many real estate industry groups.
The House version of H.R. 1 also contains another provision backed by the housing industry — elimination of the repayment requirement on an existing $7,500 tax credit for first-time homebuyers that is scheduled to sunset on July 1. But the Senate version of H.R. 1 would go farther, increasing the tax credit to $15,000 and allowing all homebuyers purchasing a principal residence within a year of the bill’s enactment to claim it on their 2008 or 2009 returns.
The National Association of Home Builders welcomed the Senate’s move, saying a $15,000 tax break for all homebuyers could generate nearly 500,000 home sales and create more than 255,000 jobs.
NAHB Chairman Joe Robson said the enhanced tax credit would be “a powerful incentive for homebuyers to get off the sidelines” and urged Congress to make sure the full $15,000 tax credit is included in the final stimulus plan.
In a separate development, Treasury Secretary Timothy Geithner today released details of the Obama administration’s new financial stability plan, a successor to the much maligned Troubled Asset Relief Program (TARP).
Geithner said the financial stability plan will include a comprehensive housing program that will provide $50 billion for foreclosure prevention programs. In order to persuade Congress to release the second half of $700 billion in TARP funding, the Obama administration had previously committed to spend $50 billion to $100 billion on a “sweeping effort” to address foreclosures (see story).
Geithner also alluded to a possible expansion of a $600 billion Federal Reserve program to drive down mortgage rates through the purchase of mortgage backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae (see story).
Further details of the housing program will be announced in coming weeks, Geithner said. According to a fact sheet issued by the Obama administration, the Treasury and Federal Reserve “remain committed to expand as necessary the current effort by the Federal Reserve to help drive down mortgage rates.”
The housing program will also establish loan modification guidelines and standards for government and private programs, and require all institutions receiving assistance through the financial stability plan to participate in foreclosure mitigation plans. The Obama administration will also build additional flexibility into the FHA’s Hope for Homeowners refinance program to enable more distressed borrowers to participate.
While the main goal of the stimulus bill is to create jobs, the financial stability plan is designed to strengthen banks and restart the flow of credit to homeowners and small businesses, Geithner said. Currently, the financial system is working against recovery, even as the recession puts greater pressure on banks, he said.
“This is a dangerous dynamic, and we need to arrest it,” Geithner said. The battle for economic recovery must be fought on two fronts — by jump-starting job creation and private investment, and by getting credit flowing again to businesses and families.
As it has done under the TARP program, the Treasury will continue to invest in banks that need additional capital, but will now impose conditions to ensure “every dollar of assistance” is used to generate additional lending, Geithner said.
In addition, the Treasury, Federal Reserve and Federal Deposit Insurance Corp. will establish a $500 billion Public-Private Investment Fund to buy up toxic loans and assets. The fund could ultimately provide up to $1 trillion in financing, Geithner said, helping to create a market for real estate-related assets that are “at the center of this crisis.”
The Treasury and Federal Reserve will also commit up to $1 trillion in backing for a consumer and business lending initiative, building on the Federal Reserve’s Term Asset Backed Securities Loan Facility (TALF) announced in November. The program will be expanded to target markets for small business lending, student loans, consumer and auto finance, and commercial mortgages.

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Incline Village Property Taxes

ALERT: #197
DATE: January 26, 2009
TO: Incline Village & Crystal Bay Property Owners
FROM: Village League Tax Revolt CommitteeDear Incline Village & Crystal Bay Property Tax Protesters,

Shortly after Alert #196 was emailed, Assessor Josh Wilson phoned to say that in addition to agreeing to decrease the assessed land values for Incline Village and Crystal Bay by 25%, he had determined to include a similar reduction to the land values in all of Washoe County in his recommendation to the County Board of Equalization (CBOE)!!

After Village League directors Les Barta, Todd Lowe and I left our last meeting with the Assessor and his staff, we had no idea how courageous a decision he was going to make.

Could this be a harbinger of future progress by other Washoe County officials to bring closure to our six year battle for justice in the courts? Could it be that the end is in sight?
CBOE APPROVES REDUCTION IN VALUES

This morning the Washoe County Board of Equalization voted to ACCEPT the recommendation of Assessor Wilson to reduce the land values of all properties in Washoe County by at least 25%. This is the first time in the history of Nevada, that an entire County has received a tax reduction that benefited ALL property owners!

The Village League has withdrawn the four class action petitions that Attorney Suellen Fulstone filed on January 15th for taxpayers in the Incline Village and Crystal Bay area; and we recommend that those of you who filed your individual petitions for appeal, withdraw those as well.

We have posted a “Withdrawal Form” for your convenience on our website. We have been notified by the office of the Assessor that it is not necessary to fill in the blank on the form stating your Hearing #.

www.NevadaPropertyTaxRevolt.org/09/CBOE-WithdrawalForm.pdf

The withdrawal form is also attached if you unable to download the form from our website.
IT DOES TAKE A VILLAGE!

Our thanks to all of you who timely filed your petitions for appeal!! We are certain that the 900+ petitions filed by the taxpayers of Incline Village and Crystal Bay for the 2009-2010 tax year helped to achieve this amazing result.

As always, we strongly recommend that you keep a copy of all documents for your own files. After you submit the “Withdrawal Form” you will not need to appear at any CBOE hearing or send in any other documentation to receive your 25% minimum land value reduction for the 2009-2010 tax year. You will be receiving another “Christmas Postcard” type notice from the office of the assessor confirming your decreased assessment value.

If, however, you feel that your property has a singular problem that may warrant a further adjustment to its assessed value, you may continue to represent yourself or engage legal counsel to represent you before the CBOE.

The Village League will not be providing legal assistance for individual cases for the 2009-2010 tax year. We do, however, have ten hearings and court actions still pending in which all of you are represented by counsel. In all of these cases the League Attorney, Suellen Fulstone, has filed class actions for all of Incline Village and Crystal Bay as well as for individual taxpayers.

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Obama, Dems ready to move on housing

Goals: Boost lending, prevent foreclosures

By Matt Carter, Tuesday, January 20, 2009.
Inman News

Barack Obama will be sworn in today as the nation’s 44th president with a green light from Congress to unleash the second half of the $700 billion Troubled Asset Relief Program, and with legislation providing an additional $825 billion jolt to the economy on tap.
Before Obama took the oath of office, lawmakers had introduced a slew of measures in the new year aimed at spurring home purchases and preventing foreclosures. Some of those measures — including tax breaks for first-time homebuyers, and a return to the higher loan limits in place for Fannie Mae, Freddie Mac and FHA during 2008 — are likely to be part of a massive economic stimulus bill.
TARP, round two
The Obama administration moves into the White House with the authority to implement the second half of the $700 billion Toxic Asset Relief Program, or TARP. In a 52-42 vote, the Senate last week shot down a resolution that would have blocked further borrowing to fund the program.
Both the House and Senate would have had to approve their own resolutions to cap TARP borrowing at $350 billion. With the Senate declining to stand in the way, the issue has largely been resolved — although Congress could still place limitations on how the next round of TARP funds is used.
Rep. Barney Frank, D-Mass., has introduced legislation that would require Obama’s Treasury Department to use a combination of steps to prevent foreclosures, which could include a loan guarantee program that would backstop lenders who agree to modify loans and a program to pay down second mortgages that can complicate loan modifications (see story).
Although many lawmakers have been frustrated at the the way TARP funds have been used so far — primarily to prop up banks through preferred stock purchase — Obama was able to persuade Congress to move forward by promising to shift the program’s emphasis and increase oversight.
In a Jan. 15 letter to congressional leaders, Obama’s top economic advisor, Larry Summers, promised that future TARP expenditures will be aimed at increasing lending and driving an economic recovery, with the “maximum degree of accountability and transparency.” Summers also committed to setting aside $50 billion to $100 billion in TARP funds for a “sweeping effort” to address foreclosures.
Summers said the incoming administration plans to implement “smart, aggressive policies to reduce the number of preventable foreclosures” by reducing mortgage payments for troubled borrowers, and by strengthening existing housing initiatives like FHA’s “Hope for Homeowners” refinance program.
Summers said the Obama administration remains committed to changing the bankruptcy code to allow judges to forgive mortgage principal — a sore point with the lending industry, which says the so-called “cramdowns” could raise mortgage rates for all borrowers (see story).
Massive stimulus bill
Legislation that’s intended to jumpstart the economy by providing $825 billion in tax cuts and investments in infrastructure like roads and bridges, schools and renewable energy has been introduced in the House.
The American Recovery and Reinvestment Act of 2009 is intended to create (or save) 3 million to 4 million jobs. The bill would provide $275 billion in tax cuts and $550 billion in spending in areas such as increased unemployment benefits for workers and investments in science and technology.
The bill includes several housing-related provisions, including granting the secretary of Housing and Urban Development the authority to return FHA loan limit floors and ceilings in high-cost areas to the higher, temporary limits in place for much of 2008. The bill would give the Federal Housing Finance Agency (FHFA) similar powers, allowing Fannie Mae and Freddie Mac to once again purchase and guarantee loans of up to $729,750 in high-cost areas.
In approving temporary, higher loan limits in the Economic Stimulus Act of 2008, Congress mandated that they be scaled back on Jan. 1. While the $625,500 limits now in place in high-cost areas is greater than the previous $417,000 conforming loan, industry groups like the National Association of Realtors are pushing for a return to the higher limits. Borrowers who require “jumbo” mortgages larger than those eligible for purchase or guarantee by Fannie, Freddie and FHA tend to pay higher rates.
With interest rates on jumbo loans nearly 2 percent higher than conventional conforming loans, NAR says buyers requiring a mortgage at the 2008 limit of $729,750 are facing $942 a month in additional payments, or $338,000 over the life of a 30-year loan. Sales of homes priced at $750,000 or more are down 47 percent from a year ago, NAR says, compared with a 3 percent drop for homes priced under $400,000.
The issue could be resolved in the stimulus bill, but Rep. Gary Miller, D-Calif., has introduced separate legislation, HR 587, that would increase FHA loan limits and the conforming loan limits for Fannie Mae and Freddie Mac during 2009.
In addition to higher loan limits, NAR is pushing for Congress to eliminate the repayment requirement on an existing $7,500 tax credit for first-time homebuyers, extend its life beyond the current July 1, 2009, sunset, and make the credit available to all homebuyers. NAR and other industry groups are also pushing for the federal government to provide subsidies that would bring down mortgage rates to stimulate buyers (see story).
In his own proposal for an economic stimulus package, House Ways and Means Committee Chairman Rep. Charles Rangel, D-N.Y., supports eliminating the repayment requirement for the first-time homebuyer tax credit. But Rangel does not propose to extend the credit through the end of 2009, as requested by NAR, or to allow anyone other than first-time buyers to claim it. In a summary of the programs Rangel would support in a stimulus bill, he said even the more limited proposal for homebuyer tax credits would cost an estimated $2.686 billion over 10 years.
Other housing bills
Other housing-related bills introduced in the new year include HR 230, which would require Fannie Mae and Freddie Mac to help provide fixed-rate mortgages at 4 percent or less by purchasing and securitizing qualified fixed-rate mortgages that meet FHFA underwriting standards. The bill, introduced Jan. 7 by Rep. Dennis Cardoza, D-Calif., is intended to prevent foreclosures and increase the availability of affordable new mortgages.
Rep. Al Green, D-Texas, on Jan. 16 reintroduced legislation that would resurrect seller-funded down-payment assistance programs for FHA-backed loans. The text of Green’s bill, HR 600, was not available at press time. But a previous bill with the same goal had the support of NAR and Financial Services Chairman Rep. Barney Frank, where the bill has been referred (see story).
Green is also the sponsor of HR 476, which would provide $52 million over five years for stepped up nationwide testing and enforcement of housing discrimination laws, as well as education and outreach. The bill would provide $25 million for private, nonprofit organizations to study the causes of housing discrimination and develop pilot projects addressing the problem.
Rep. Paul Kanjorski has reintroduced legislation that would accomplish a goal sought by Realtors: a ban on financial holding companies and national banks from engaging in real estate brokerage or real estate management activities. Kanjorski’s bill, HR 111, has 59 co-sponsors.
A bill that would accelerate the implementation of new rules for lenders, HR 514, was introduced Jan. 14 by Rep. Elton Gallegly, D-Calif. Many aspects of the Federal Reserve’s update of Regulation Z, which spells out steps lenders are expected to take to comply with the Truth in Lending Act, are currently scheduled to take place in October. Changes to Regulation Z include prohibitions against coercion of appraisers, and restrictions on deceptive or misleading advertising (see story).

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